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THE NEW TAX SYSTEM EXPLAINED IN BEER

By Sniper following x   2017 Dec 23, 8:16am 1,566 views   24 comments   watch   sfw   quote     share    


Pass this on to all your Libbie friends who claim it's a giveaway to the RICH!

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Suppose that every day, ten men go out for beer and the bill for all ten comes to $100...
If they paid their bill the way we pay our taxes, it would go something like this...
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7..
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do..

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20". Drinks for the ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men ? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from every body's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).
The sixth now paid $2 instead of $3 (33% saving).
The seventh now paid $5 instead of $7 (28% saving).
The eighth now paid $9 instead of $12 (25% saving).
The ninth now paid $14 instead of $18 (22% saving).
The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

"I only got a dollar out of the $20 saving," declared the sixth man. He pointed to the tenth man, "but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar too. It's unfair that he got ten times more benefit than me!"

"That's true!" shouted the seventh man. "Why should he get $10 back, when I got only $2? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works.

The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.

Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible



#politics
1   marcus   ignore (1)   2017 Dec 23, 9:23am   ↑ like (1)   ↓ dislike (0)   quote        

Why is that lie about the poor who pay payroll taxes which get spent in the same way income taxes do always the first thing defenders of supply side nonsense say ?

What I want to know is how do supposed deficit hawks such a s Paul Ryan, and supposedly all the other republicans support the idea of lowering taxes on everyone ? How can their future screaming bloody murder about deficits be considered legitimate after this tax bill ?

At least when Bush did this, there were surpluses projected out in to the future.

Re" The meme about "the problem with socialism"

The problem with our current capitalism is eventually deficits and total debt will be to high. Then what ?

We essentially are borrowing money to give to the rich. People whose net worth increases every year, even when they live a luxurious lifestyle and also even when they pay 10 times higher taxes than the average household.
2   Onvacation   ignore (2)   2017 Dec 23, 9:28am   ↑ like (1)   ↓ dislike (0)   quote        

anonymous says

Can you at least get your sources right Deadeye ?

Is the analysis wrong whoever wrote it?

If you can't counter the argument question the source.
3   marcus   ignore (1)   2017 Dec 23, 9:42am   ↑ like (1)   ↓ dislike (0)   quote        

Onvacation says

Is the analysis wrong whoever wrote it?


Yes. Because paying taxes is nothing like splitting the bill for beers. When one's income is mostly off of investments and is high enough that it exceeds his high cost of living by perhaps many hundreds of thousands dollars or millions, of course he should be paying a higher tax rate, not on all of his income, but perhaps on increments over say 200K, and higher still on the part that is over say 500K.

Comparing what that guy pays to what is paid by people that can't even afford decent housing or save anything, is ridiculous. You can't represent anything like this with going out for beers.

Maybe the rule for those guys going out for beers is that they all pay for their first two beers, but if one is having 100 beers, they should have to pay for the last 88 themselves. I get why this doesn't really work as an analogy, but it's an attempt to address whats missing from the stupid analogy above.

The silly beer story also can't touch the fact that the reason the rich guy is even able to make millions is that the U.S. and our system and markets existed in the first place. That's right, it's "you didn't make" the roads, or the internet or most of the other infrastructure and market related factors that gave you the opportunities in the first place. You've got to pay it forward.
4   Strategist   ignore (1)   2017 Dec 23, 10:08am   ↑ like (1)   ↓ dislike (1)   quote        

Sniper says
Pass this on to all your Libbie friends who claim it's a giveaway to the RICH!


ROFL ROFL ROFL
The message was loud and clear. Thanks for posting. Now our socialist friends are even more upset, and are ready to beat up the 9th guy.
5   Strategist   ignore (1)   2017 Dec 23, 10:10am   ↑ like (2)   ↓ dislike (0)   quote        

Hey Marcus, when there is no one to buy the beer, you can have champagne. Bwah ha ha ha ha ha.
Man I love being an evil capitalist.
6   anonymous   ignore (null)   2017 Dec 23, 10:13am   ↑ like (0)   ↓ dislike (0)   quote        

anonymous says
The first four men (the poorest) would pay nothing.


This is a lie.

PAYROLL TAXES !!!!!!!
7   anonymous   ignore (null)   2017 Dec 23, 10:13am   ↑ like (0)   ↓ dislike (0)   quote        

Minor nitpick: If you add up what each person is paying in the second example, it totals $79, not $80, and the listed previous amount is $99 instead of the $100 it should be.

The point stands though. Interesting. The real culprit here is the cost of living after what you're left with, which is constantly being eroded by actions of the FED, banks, and congress.
8   Onvacation   ignore (2)   2017 Dec 23, 10:17am   ↑ like (0)   ↓ dislike (0)   quote        

marcus says

Maybe the rule for those guys going out for beers is that they all pay for their first two beers, but if one is having 100 beers, they should have to pay for the last 88 themselves. I get why this doesn't really work as an analogy,

It's the math.
9   Onvacation   ignore (2)   2017 Dec 23, 10:20am   ↑ like (1)   ↓ dislike (0)   quote        

anon_08dee says
anonymous says
The first four men (the poorest) would pay nothing.


This is a lie.

PAYROLL TAXES !!!!!!!

You have to have a job to be on payroll.
10   Onvacation   ignore (2)   2017 Dec 23, 10:20am   ↑ like (0)   ↓ dislike (0)   quote        

anon_fe1ba says
The real culprit here is the cost of living after what you're left with, which is constantly being eroded by actions of the FED, banks, and congress.

Yep
11   HEYYOU   ignore (13)   2017 Dec 23, 10:21am   ↑ like (1)   ↓ dislike (0)   quote        

Republicans & beer? There is no telling what kind of FUBAR they can come up with.

Onvacation says
If you can't counter the argument question the source.


Does the Tax Bill increase taxes & for how many?
If so,it's a signed Republican Tax Increase Bill.
Why does it continue the Trumpcare penalty for not having health insurance in 2018.
I'm not the source of higher taxes & Republican Big Govt. punishment.

"Is the analysis wrong whoever wrote it?"
If a frog had wings,it wouldn't bump it's ass.

HEYYOU,Master of Pretzel Logic even with all the patnet competition.
12   Sniper   ignore (11)   2017 Dec 23, 10:27am   ↑ like (2)   ↓ dislike (1)   quote        

anon_08dee says
anonymous says
The first four men (the poorest) would pay nothing.


This is a lie.

PAYROLL TAXES !!!!!!!


The moral of the story is based around the FEDERAL tax situation with the new tax bill. Where was anything mentioned about payroll taxes?
13   Sniper   ignore (11)   2017 Dec 23, 10:32am   ↑ like (3)   ↓ dislike (2)   quote        

marcus says
We essentially are borrowing money to give to the rich.


hhhmm, this seems like a simple concept to grasp....

Sniper says
The people who already pay the highest taxes will naturally get the most benefit from a tax reduction.


Apparently it isn't for a math teacher.
14   Sniper   ignore (11)   2017 Dec 23, 10:35am   ↑ like (4)   ↓ dislike (2)   quote        

anon_fe1ba says
The point stands though. Interesting.


The point in the OP is, that over 40% of the population pay NOTHING in Federal taxes now, so how should they get a bigger tax credit? Write them a check?

Sniper says
The first four men (the poorest) would pay nothing.


See, should we PAY these guys to drink the beer that they are not paying for? Would that be fairer?
15   CovfefeButDeadly   ignore (4)   2017 Dec 23, 1:48pm   ↑ like (2)   ↓ dislike (0)   quote        

This is bad when we are soley talking about Federal income tax and the corporate tax rate and the leftists have to inject payroll tax....which if you ever tried to do anything with, the Democruds would scream bloody murder.
16   ja   ignore (0)   2017 Dec 23, 2:40pm   ↑ like (0)   ↓ dislike (0)   quote        

You have to consider that the $20 savings is in reality a -$2 for everybody (less services, assuming they are distributed equally)

Also, expenditure on beer has impact on your marginal income utility. For taxes, being a significant amount of your income, marginality is not suitable (in other words, you get $1000 of a person making $10000 and you really screw them)
17   anonymous   ignore (null)   2017 Dec 23, 3:40pm   ↑ like (0)   ↓ dislike (0)   quote        

Sniper says
Does Medicaid cover the treatment?


I don't know, do they cover frontal lobotomy.
18   anonymous   ignore (null)   2017 Dec 23, 3:42pm   ↑ like (0)   ↓ dislike (0)   quote        

What if the 4 poor people aren't drinking any of the beer?
19   Ceffer   ignore (1)   2017 Dec 23, 3:55pm   ↑ like (0)   ↓ dislike (0)   quote        

I'd like the new tax system explained in something I can understand better, like beer puke.
20   Sniper   ignore (11)   2017 Dec 23, 4:18pm   ↑ like (3)   ↓ dislike (0)   quote        

marcus says
Because paying taxes is nothing like splitting the bill for beers.


ja says
expenditure on beer


anon_13ce6 says
aren't drinking any of the beer


21   CovfefeButDeadly   ignore (4)   2017 Dec 23, 4:38pm   ↑ like (1)   ↓ dislike (0)   quote        

Sniper says
se paying taxes is nothing like splitting the bill for beers.


ja says
expenditure on beer


anon_13ce6 says
aren't drinking any of the beer


BAHAHAHAHAHAHA!
22   Strategist   ignore (1)   2017 Dec 24, 9:26am   ↑ like (0)   ↓ dislike (0)   quote        

I just thought of a great idea. We make lots of different beers at different prices, and let all 10 of them buy what they want and can afford.
Wait a minute.....somebody already thought of that. Damn.
23   HeadSet   ignore (1)   2017 Dec 25, 6:57pm   ↑ like (0)   ↓ dislike (0)   quote        

Sniper says:

See, should we PAY these guys to drink the beer that they are not paying for? Would that be fairer?


It looks like Earned Income Credit was kept intact for 2018.
24   Strategist   ignore (1)   2017 Dec 25, 7:28pm   ↑ like (1)   ↓ dislike (0)   quote        

HeadSet says
Sniper says:

See, should we PAY these guys to drink the beer that they are not paying for? Would that be fairer?


We already do that. It's called welfare.
Now they want to beat up the taxpayer for getting a tax cut.




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